Truth-in-Lending Act (Regulation Z)
The Truth-in-Lending Act (TILA) is a federal law that requires lenders to provide clear and accurate information to consumers about the terms of their loans. It was enacted in 1968 as part of the Consumer Credit Protection Act and is enforced by the Federal Reserve Board. The law requires lenders to disclose the cost of borrowing, including the annual percentage rate (APR), finance charges, and other fees associated with the loan. It also requires lenders to provide a written disclosure statement that outlines the terms of the loan, including the APR, finance charges, and other fees. The law also requires lenders to provide a right of rescission, which allows consumers to cancel certain types of loans within three days of signing the loan agreement.
History of the Term
The Truth-in-Lending Act was enacted in 1968 as part of the Consumer Credit Protection Act. The law was designed to protect consumers from deceptive and unfair lending practices. It was intended to ensure that consumers are aware of the cost of borrowing and the terms of their loans. The law was amended in 1982 to include the Home Equity Loan Consumer Protection Act, which provides additional protections for consumers who take out home equity loans.
Comparison Table
| Term | APR | Finance Charges | Other Fees |
|---|---|---|---|
| Loan A | 5.5% | $500 | $50 |
| Loan B | 7.5% | $750 | $75 |
Summary
The Truth-in-Lending Act is a federal law that requires lenders to provide clear and accurate information to consumers about the terms of their loans. It requires lenders to disclose the cost of borrowing, including the APR, finance charges, and other fees associated with the loan. It also requires lenders to provide a written disclosure statement that outlines the terms of the loan, including the APR, finance charges, and other fees. Consumers can find more information about the Truth-in-Lending Act on the Federal Reserve Board’s website.
See Also
- Consumer Credit Protection Act
- Home Equity Loan Consumer Protection Act
- Annual Percentage Rate (APR)
- Finance Charges
- Right of Rescission
- Fair Credit Reporting Act
- Fair Debt Collection Practices Act
- Equal Credit Opportunity Act
- Consumer Financial Protection Bureau
- Truth in Savings Act
